Ashley Alder, CEO of the Hong Kong Securities & Futures Commission (SFC), says the Stock Connect initiative has had a positive knock-on effect on relations with its Chinese counterpart – especially around enforcement and investigation.

The regulator’s head says Stock Connect has proved to be “a really significant change, because it changes the balance of incentives to cooperate across borders”.

The Shanghai-Hong Kong Stock Connect was launched in 2014 to allow investors mutual stock market access using their local brokerage channels and clearing houses.

Alder is also chairman of the International Organization of Securities Commissions (IOSCO). Answering a question from the floor from Euromoney at the opening of IOSCO’s new regional hub in Kuala Lumpur, he says that although IOSCO members agree to assist one another in terms of enforcement cooperation across borders, in practice imbalances have historically made that cooperation challenging with mainland China.

“The reality in Hong Kong and China is that for many years the major interaction between global capital and mainland China was centred on the listing of mainland businesses in the Hong Kong market,” he says.

“The experience around regulatory cooperation of the type with which we’re familiar in IOSCO, so far as the SFC and CSRC [China Securities Regulatory Commission] are concerned, has developed over time – and it had to.”

Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.